Open innovation and closed innovation: a simulation study on market conditions and innovation strategies

The role of open or closed innovation (CI) strategies regarding the innovation or rather entrepreneurial success is not solved yet. Therefore, this simulation study examines by means of a multi-agent system the effects of open innovation (OI) on the entrepreneurial success of SMEs under differently parameterised market conditions. The simulation study shows that different market conditions and the characteristics of human resource allocation of a company have a relevant influence on the success of an innovation strategy. The experiments show that OI can mainly take advantage of more human resources, whereas CI lags behind OI in the financial aspect but exceeds OI in terms of market share. Furthermore, the simulation revealed that concrete company situations and market conditions have different effects on the examined innovation strategies. These findings help to stimulate further, even empirical, research efforts.